WHEAT: WORLD MARKETS AND TRADE
Argentine Exports Jump to Record: With very large sales and shipments in recent months, Argentine exports in 2004/05 are expected to climb to a record. Shipments, however, are very seasonal due to the need to free up storage and transportation space before soybean and corn harvests. As a result, much of the available exportable surplus was sold quickly after the harvest in November and December, and prices have now climbed. Other than continued sales to Brazil, it is unlikely that much wheat will be available for sale to other markets for the next 7 months until the new harvest approaches. (See PDF version for chart)
EU Export Subsidies Drop: During March, EU subsidies fell below 4 euros per ton (from 10) on licenses of less than 350,000 tons (compared to 1.2 million the previous month). With limited late-season demand in key Mediterranean markets, more wheat will likely go into intervention, with ending stocks expected to more than double from last year.
Domestic: Wheat prices rallied initially in March, but trended downward for the rest of the month as the dollar gained strength and crop conditions for winter wheat remained rather good. Falling basis premiums added to the downward pressure for DNS. (See PDF version for chart)
For the week ending April 1, and compared to a month earlier, average HRW prices were $9 a ton lower, while SRW were $15 a ton lower. HRS prices dropped $10 a ton, while SWW lost only a $1 a ton.
TRADE CHANGES IN 2004/2005
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